The Financial Conduct Authority (FCA), in light of stakeholder interest in the pending takeover of Liverpool Victoria Financial Services Limited (LV=), has published its response to Gareth Thomas MP’s questions surrounding LV=’s proposed sale to a private investment firm.
In the response, insurance and conduct specialists director Matt Brewis wrote: “We recognise the important role of the FCA in a transaction such as this, namely applying our rules and principles as part of our ongoing supervision of LV= and considering the process it has followed to date in deciding to sign a deal with Bain Capital.”
“As always,” said Brewis, “we are motivated by our consumer protection objective, and we are conscious that customers and members of LV= will not be privy to all the details of confidential bids received as part of a competitive bidding process that led to the proposed deal with Bain Capital.
“One of our considerations has been whether LV= examined a comprehensive range of strategic options side by side, including running a competitive process to generate potential bids for the business. We were focussed on ensuring that the process LV= followed would enable decisions that are fair to their policyholders and members, and that recognise the particular interests of with-profits policyholders, many of whom will be maturing in the next 10 years.”
The FCA official, who had written to Thomas before, also reiterated that the watchdog’s earlier decision not to object to LV= putting the proposed changes to members and the court followed significant scrutiny by the regulator.
The majority of the MP’s queries – including the question on what information will those eligible to vote in the proposed demutualisation ballot receive from LV=, the FCA, and opponents of the sale – were answered, while some have been classified as Freedom of Information requests.
Brewis – whose camp had made clear to LV= the FCA’s expectations of it to ensure that members have access to the information they need to make an informed decision – noted: “If members vote in favour of the scheme of arrangement, we will be writing to the court for the sanction hearing in late December with our views.
“We also continue to provide input to the PRA’s (Prudential Regulation Authority) consideration of Bain Capital’s change in control application, and would assess the Part VII transfer in 2022 and provide our views to the court, if members vote in favour of both the deal with Bain Capital and the scheme of arrangement, and if the change in control application is approved.”
According to the FCA, LV= has a total of more than 1.22 million customers, of which over 1.15 million are also members and would potentially be eligible to vote subject to certain criteria.
The Labour (Co-op) MP for Harrow West chairs the All-Party Parliamentary Group for Mutuals, which is strongly against the £530 million takeover and has been urging LV= members not to support it.
